Variance at Completion: PMP Topics to Know

vac pmp

Variance at completion, or VAC, is a deceptively simple concept. After all, the formula for VAC is:

Variance at Completion = Budget at Completion – Estimate at Completion,
or VAC = BAC – EAC

If you know BAC and EAC, you wouldn’t even need a formula to get to the answer. You would just need to draw on the experience you have with variance and extrapolate it to your PMP exam.

So now you might be wondering, well, why am I here? The good (?) news is that the PMP exam isn’t going to let you off so easy!

You may encounter a very simple VAC problem on your PMP exam, but it is more likely that you will encounter something more complex. Getting your PMP doesn’t require you to be a mathematical genius — I’m sure not — but it does require you to brush up on your algebra skills to solve complex problems.

Here’s an example of a problem you could encounter on the PMP exam. (We’ll leave out the multiple choice options for now.)

You are working on a project that has a BAC of $1 million. Your CPI is 0.9, and this variance is expected to continue.. What is your VAC?

Now that’s a good earned value management (EVM) problem for your PMP exam. Here’s how we go about solving it:

  1. You know that you need the formula VAC = BAC – EAC. Write it down.
  2. You have BAC, so ask yourself, “How do I determine EAC?”
  3. When a variance is expected to continue, you can determine EAC using the formula BAC/CPI.
  4. EAC = BAC/CPI = $1 million / .9 = $1,111,111
  5. VAC = $1 million – $1,111,111 = -$111,111. You expect to have a cost overrun of $111,111.

Now you know that you can’t just learn VAC in a vacuum. You need to know a variety of formulas and enough algebra fit them all together correctly.

Here are some additional resources for you to get started with EVM:

Having a good grasp on VAC requires having a good grasp on all of EVM. What do you need to jumpstart your EVM and PMP knowledge? Comment below.

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